homeowner's insurance

As a new home buyer, some of the best news you can get when buying a home is that the your offer on the home of your dreams has been accepted. You are going to be thrilled to own a home, but this is the most crucial stage of the home buying process for a few important steps. One of the most essential things you can do as soon as your offer has been accepted is selecting homeowner’s insurance.

Usually required by a lender, homeowner’s insurance is protection against a loss that can happen to your home, to someone in your home and the surrounding structures of your home. Generally, homeowner’s insurance covers your  dwelling, which includes your actual home, the things inside your home and attached structures such as your garage. It also covers other structures on your property that aren’t attached, like an additional detached garage, gazebo, shed or dog house (known as “other structures coverage”).

The personal property coverage area of homeowner’s insurance is responsible for covering your personal property, like things you own (computers, jewelry, furniture, etc.) This area of coverage requires a bit more thought and an understanding of how a policy covers personal property. For example, if you have a considerable collection of art, jewelry or other artifacts, you may need to add more coverage to your chosen policy for those items.

Liability coverage is exactly what it sounds like: it protects you and your visitors if they are injured on your property. If your guest falls down your stairs, flies off of a trampoline or something else happens to them, you are usually covered under your liability coverage policy. If a lawsuit is filed, it will keep you from paying medical and legal expenses.

Finally, loss of use coverage protects you if your home becomes so damaged that you have to move out (like a house fire). During the repair of your home, the loss of use policy covers hotel costs or daily living expenses such as food and travel.

Not all policies cover these areas and the ones that do cover each to a different extent, so it’s important to have a firm understanding of your chosen homeowner’s insurance policy to know what protects you and what doesn’t. Because many policies vary so widely, it is important to do your research when choosing your homeowner’s insurance.

When shopping for a homeowner’s insurance policy, be sure to consider exactly how your policy options cover you om the case of a loss. It is, on the whole, better to choose an insurance policy that covers the actual cost to replace your home or property, rather than the actual current cash value of your home or property.

For example, personal property such as a laptop is not worth the same that it was when it was first purchased. If something happens to that laptop and it needs replacing, but the insurance policy that covers it only covers its actual worth, then the owner of the laptop is stuck replacing a potentially $2,000 MacBook Pro with something valued at $700.

For homes the idea is the same. When you move in, your home depreciates in value and continues to every year. If the home burns down and was valued at $100,000 at the time of the house fire, and you need $350,000 to replace it, then you should be glad you purchased a homeowner’s insurance policy that covers the cost of replacing, rather than its value.

So, how do you find the best homeowner’s insurance policy? Start your search on the web. Find out how other customers have reviewed specific policies that you are considering, and get quotes online. Additionally, be sure to speak to as many insurance agents and mortgage lenders as you can, and it’s always a good idea to consult your real estate agent. Whatever policy you end up with, make sure it is satisfactory to the needs of you and your family. Learn more about what your homeowner’s insurance covers here.